If you run an Ecommerce or CPG business in Kansas, securing a Kansas Resale Certificate is a smart move to protect your margins and streamline operations.
This certificate allows you to purchase inventory and raw materials tax-free, helping you lower upfront costs, stay competitive in pricing, and remain compliant with Kansas sales tax laws.
Understanding Resale Certificates in Kansas
What is a Kansas Resale Certificate?
In Kansas, a Resale Exemption Certificate is issued by the Kansas Department of Revenue. It allows businesses to:
- Purchase goods without paying sales tax, provided the buyer plans to resell the goods to their customers in the normal course of their business.
- Make tax-exempt purchases of inventory and materials that will become part of the products they sell by presenting a valid resale certificate to their suppliers.
The resale certificate helps avoid double taxation, once at wholesale and again at the point of retail sale.
However, this exemption applies only to inventory purchases intended for resale. Businesses are still required to collect and remit sales tax on sales made to end consumers.
Why do you need a Kansas Resale Certificate?
Obtaining a resale certificate in Kansas offers several significant advantages for businesses that purchase goods for resale.
Here are some key benefits:
- Avoid Paying Sales Tax on Inventory: When you purchase inventory for resale, presenting a resale certificate lets you skip paying Kansas sales tax upfront, improving your cash flow.
- Maintain Competitive Pricing: By avoiding sales tax on purchases, you reduce your costs and gain more flexibility in pricing, especially helpful in competitive or price-sensitive markets.
- Legal Compliance: Proper use of a resale certificate ensures your business remains compliant with Kansas sales tax laws and avoids potential audits or penalties.
In Kansas, the form used is the CDTFA-230 General Resale Certificate.
Businesses must use Form ST-28A, including their valid Kansas Sales Tax Account Number, as proof that the Kansas Department of Revenue authorizes them to make tax-exempt purchases for resale.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Kansas Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. A Kansas Resale Certificate (Form ST-28A), on the other hand, allows you to purchase goods tax-free from suppliers if those goods are intended for resale. To use a resale certificate, you must have an active sales tax permit.
Who Can Use a Resale Certificate in Kansas?
Businesses that purchase goods for resale can use a Kansas Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Kansas Sales Tax Permit.
How to Get a Resale Certificate in Kansas: A Step-by-Step Guide
Getting a resale certificate in Kansas is simple, but you’ll need to meet a few key requirements first. Here’s how to do it:
1. Make Sure You’re Eligible
Your business must sell taxable goods or services in Kansas and be registered with the Kansas Department of Revenue. Only businesses with an active Kansas Sales Tax Registration Number are authorized to use a resale certificate.
2. Get a Kansas Sales Tax Permit
If you don’t already have one, apply for a Kansas Sales Tax Permit through the Kansas Department of Revenue Customer Service Center. This permit is required before you can issue or accept a resale certificate.
Need help? Read our blog: How to Get a Seller’s Permit in Kansas
3. Gather Your Business Information
You’ll need basic business details to complete the resale certificate, including:
- Business Identification Information: Legal Business Name, Physical Address, Mailing Address
- Business Entity Structure (i.e., Sole Proprietorship, Partnership, Subchapter S Corp., Corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Name, Address, and SSN of Owners, Partners, or Officers
- Business Activity Details: Date & State of Incorporation, Start Date with the State of Kansas (Nexus Start Date), Estimated Annual Taxable Sales in Kansas, Accounting Method (Cash vs. Accrual)
- NAICS Code
4. Complete Form ST-28A
Download and fill out Form ST-28A (Resale Exemption Certificate) from the Kansas Department of Revenue. This form must be completed in its entirety and presented to your vendors when making qualifying purchases for resale.
5. Submission
No submission required in Kansas. You don’t submit the resale certificate to the state. Instead, give the completed form directly to your suppliers when buying items for resale.
6. Pay Any Applicable Fees
There is no fee to use the resale certificate itself (Form ST-28A).
7. Understand Renewal Requirements
The Kansas Resale Certificate (Form ST-28A) does not have a fixed expiration date. It remains valid as long as your Kansas Sales Tax Permit is active. Sellers are advised to obtain a new resale certificate from buyers if there’s a significant business change or if no sales have occurred with that buyer for more than 12 months.
How to Use a Resale Certificate in Kansas
To properly use your Kansas resale certificate for tax-exempt purchases, you must present a completed Form ST-28A (Kansas Resale Exemption Certificate) to your supplier at the time of the transaction. This certifies that the items you’re buying are for resale and not for personal or business use.
Kansas generally does accept resale certificates issued by other states. However, there might be specific conditions:
In-State Buyers
Kansas-based businesses must:
- Be registered with the Kansas Department of Revenue
- Provide their valid Kansas Sales Tax Registration Number on the certificate
- Include a description of the tangible property or taxable service being purchased
Sellers must retain the completed resale certificate for at least three years, as outlined in Kansas Publication KS-1520.
Out-of-State Buyers
Kansas generally allows the use of out-of-state resale certificates under certain conditions:
- Out-of-state buyers who are not registered for Kansas sales tax should generally use Form ST-28M (Multi-Jurisdiction Exemption Certificate) when purchasing inventory or component parts for resale from a Kansas vendor.
- If the out-of-state buyer has sales tax nexus in Kansas (e.g., drop shipping into the state), they must provide a Kansas sales tax registration number on the certificate.
- If the buyer has no nexus with Kansas and is not registered for Kansas sales tax, they should use Form ST-28M. While some Kansas sellers may accept the buyer’s home state’s resale certificate, using the ST-28M is generally the recommended practice as it’s the Kansas-provided form for such multi-jurisdictional exemptions.
If you are an out-of-state business purchasing from a vendor in Kansas and plan to use your home state’s resale certificate, be prepared to provide it at the time of purchase. It’s always a good idea to confirm the vendor’s policy on accepting out-of-state certificates beforehand.
For more information regarding sales tax exemption laws in Kansas, you may visit the state’s website.
Multi-Jurisdictional Resale Certificates
A multi-jurisdictional resale certificate is a standardized form designed to simplify tax-exempt purchases for businesses that operate and make purchases for resale across state lines.
Unlike a standard resale certificate issued by a single state, a multi-jurisdictional certificate aims to be recognized and accepted by multiple states as valid proof that the goods being purchased are intended for resale and are therefore exempt from sales tax at the time of purchase.
However, it’s crucial to understand that not all states accept these multi-state forms, and acceptance can come with specific conditions.
In Kansas, here are the main multi-jurisdictional resale certificates and how they apply:
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: Kansas allows use of this form only if it includes the buyer’s Kansas Sales Tax Registration Number and is fully completed. This certificate is published by the Multistate Tax Commission (MTC) and is recognized by many states for tangible personal property resale exemptions.
- Streamlined Sales Tax (SST) Certificate of Exemption: Kansas is a full member of the Streamlined Sales Tax Governing Board. As such, the Streamlined Sales Tax Certificate of Exemption is a recognized and accepted form for tax-exempt purchases for resale in Kansas. Kansas provides its version, Form PR-78SSTA. If a buyer is using the general SST Certificate of Exemption, it should be fully completed with their valid sales tax registration information (if registered in Kansas).
Businesses need to verify whether Kansas accepts these multi-jurisdictional certificates and if there are any specific requirements or limitations on their use within the state. This is to avoid any audit issues.
Responsibilities When Using or Accepting a Kansas Resale Certificate
Buyer Responsibilities
If you’re using a Kansas resale certificate, you’re responsible for ensuring it is used only for purchases of goods you intend to resell. Using it for non-qualifying items like office supplies, tools, or equipment is a misuse and may result in penalties or back taxes.
- Kansas-based buyers: You must be registered with the Kansas Department of Revenue and provide a valid Kansas sales tax registration number when using Form ST-28A (Resale Exemption Certificate). This certificate should only be used to purchase items directly tied to your regular line of taxable retail business. For example, a clothing store should not use it to buy electronics unless those are also part of its resale inventory. Misuse could trigger audits and tax liabilities.
- Out-of-state buyers: Out-of-state retailers may use the Multi-Jurisdiction Exemption Certificate (Form ST-28M) when buying inventory in Kansas, but only under specific conditions. If the items are being drop-shipped into Kansas and the buyer has nexus in Kansas, they must provide a Kansas sales tax number. If they do not have nexus with Kansas, they should use the Multi-Jurisdiction Exemption Certificate (Form ST-28M). While some Kansas vendors may accept the buyer’s home state’s general resale certificate, using the Kansas ST-28M is the designated and most compliant method for out-of-state buyers not registered in Kansas to claim the resale exemption.
Seller Responsibilities
As a seller in Kansas, accepting a resale certificate comes with the responsibility of verifying and retaining proper documentation for tax-exempt sales. You must:
- Accept the certificate in good faith
- Ensure it includes all required information: buyer’s name, address, sales tax permit number (or equivalent), reason for exemption, and signature
- Reject the certificate if the items aren’t for resale (e.g., personal or business use)
- Retain records for at least three prior years: You must keep all exemption certificates and related sales tax documentation for your current year and the three years prior. Do not submit resale certificates to the Kansas Department of Revenue with your return; just keep them on file in case of an audit.
Frequently Asked Questions About the Kansas Resale Certificate
Are There Penalties for Misusing a Kansas Resale Certificate?
Yes. Misusing a resale certificate to avoid sales tax unlawfully is a misdemeanor in Kansas. According to K.S.A. 79-3651(e), a buyer convicted of this offense may be fined up to $1,000, imprisoned for up to one year, or both. On top of that, the Kansas Department of Revenue may impose a civil penalty of either $250 or ten times the tax due per transaction, whichever is greater.
Does a Kansas Resale Certificate Expire?
Kansas resale certificates do not have a specific expiration date. However, sellers are advised to request a new certificate if more than 12 months pass without a sale from the buyer. The resale certificate is only valid while the buyer’s Kansas Sales Tax Permit remains active.
How Do I Verify a Resale Certificate in Kansas?
To verify a buyer’s resale certificate, request a completed ST-28A (for in-state buyers) or ST-28M (for out-of-state buyers). Check that the form includes the buyer’s name, address, sales tax permit number, and reason for exemption. Then, use the Retailer Verification of a Tax Entity Exemption Certificate tool from the Kansas Department of Revenue to confirm that the buyer’s exemption certificate is valid and active.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Kansas. TaxHero simplifies the process, from keeping your Kansas Sales Tax Permit active to ensuring you use resale certificates correctly.
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Schedule a Demo to see how TaxHero can streamline your resale certificate in Kansas process today!